Orange juice, cocoa, coffee futures lead commodity gains

Weather patterns are creating quite a stir in the commodity markets as orange juice futures reach a record high for the month of November. Yahoo Finance Markets Reporter Jared Blikre examines orange juice, coffee, and cocoa futures as they lead gains in commodity markets year-to-date.

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Video transcript

BRAD SMITH: The weather outside may be frightful, but for some commodities futures, soft commodities futures, it has been pretty delightful-- coffee, cocoa, orange juice, OJ. They have soared more than any other raw materials in 2023 with orange juice leading the charge, hitting a record high in November up over 90%. Here to break down the business of sips, we've got our very own Jared Blikre. Hey Jared.

JARED BLIKRE: Hey Brad. I love this time of year because we get to talk about things. I don't talk about frozen concentrate orange juice enough, but you can see up 93.6% this year. If I superimpose this, we'll have to do this mentally, on my leaderboard here you can see not quite up to Bitcoin, that's up 150% year to date. And not quite up to the New York FAANG index, and that includes a Magnificent Seven for the most part. But it is greater than Ark, and a 64% for that security for that ETF is pretty sizable.

But as you mentioned, orange juice is a soft, and we don't talk about those a lot. It's a classic commodities. It's kind of a catch all that includes coffee, as well as some others here, cocoa, for instance. Cocoa up 66.7%. And these are assets that investors can buy through ETFs that are generally uncorrelated to the rest of the market.

I can show you a chart of OJ here, it's not going to have that much correlation to 10-year T-note yield. It is going to be-- it is going to be influenced by the dollar. But guess what? The dollar has been relatively trendless this year. I think the US dollar index is down only mildly from the start of the year. So it hasn't been too much of a force here.

And you can see orange juice coming off record highs here. The impetus, well, as it often is the case with commodities, it is weather-related, as well as disease. And for that matter, those are the same reasons that we are seeing cocoa at elevated and record prices as well. You can see up 66%. Although a different part of the world and different diseases, different weather patterns, the story is somewhat the same there.

And just kind of rounding out the top row, we have feeder cattle, that's up 22%, coffee up 14%, gold, remember gold, that's up 10%. That gets a lot of headlines, as well as sugar. There's another soft that's up 9%. And by the way, lumber, that is up 5% as well. But I think one of the bigger surprises this year is that we did not see more action in the commodities.

There was all kinds of expectation with China, the reopening at the beginning of the year and the demand that that was supposed to cause. Well, that did not really occur. And we can see the S&P GSCI index, that is pretty much toward the lows of the year there.

And what I think is interesting if we take a five-year view, we can see this spike here. This was actually due to the Russian invasion of Ukraine, but we've been relatively trendless for most of the year. So not a whole lot acting there, although in individual issues I think you could make the argument quite well that we did see a lot of action.

Here is crude oil. I'm just going to chart that real quickly. I don't think a lot of people expected that we'd be 8, 10 weeks into a downtrend right here touching the low-- touching the high 60s, but nevertheless, here we are. Back to the main point there, orange juice 93%, guys.

SEANA SMITH: Massive run up in orange juice. All right, Jared. Thanks so much for breaking that down for us.